Ironically, he is a republican who took on a vice-regal role in the Australian island state of Tasmania that had the strongest support for keeping the Britishmonarchy in the 1999 referendum. Premier Jim Bacon chose him for a five year term to put Tasmania on the map, hoping to share in Butler's global fame. Butler dropped useage of the honorific 'your excellency' amongst his staff, but his AUD$370,368 a year salary , more than the Governor-General or Prime Minister, rose eyebrows in the conservative state (the smallest and poorest in Australia).

However it is his personality, described as incredibly egocentric, and strong views that were less forgivable. Butler spoke out against the war in Iraq in 2004, despite convincingly endorsing the belief before the war that Saddam had retained WMD. In Australia and other Commonwealth countries with the British Queen as the head of state, it is highly inappropriate for state governors to comment on political matters.